Journey to Financial Independence

On India’s Independence Day, let me tell you my journey of financial independence.

When I was in class 11, my father, who was the sole earning member of our family, became seriously ill and had to leave his job, one where he had worked for over 25 years. Our family came face-to-face with a massive financial setback. From being reasonably well off to suddenly barely making ends meet, was a massive shock to my psyche.

When I started my job after finishing my engineering, a friend gave me a book which changed the trajectory of my life. Robert Kiyosaki’s Rich Dad, Poor Dad. The book talked about financial freedom and drilled in me the fact that depending on a salaried job is not going to make me either financially independent or wealthy. It stressed on becoming either a business owner or an investor as a way out.

Now, no one in our family had ever run a business. At 22 years of age, with no understanding of business and no money and parents to support, starting a business was out of the question. The only way left was becoming an investor. I came up with the same problem here as well. No one in our family had ever invested in the share market. I practically knew nothing. But as luck would have it, I was working in an IT company and had access to the internet after office hours on our project manager’s desktop (Odd as it may sound now, that is how it was in 2000!!)

I started reading up whatever I could on equity investing. I opened an online trading account, something that was just being launched around that time.  I started reading up all the research reports I got from the brokerage. I read all (and I literally mean all) the articles in investpedia.com and fool.com. I used to have trouble even with basic terms. I did not know what EPS meant or what book value was. So, I started taking notes and learning.

I was always an avid reader and I started devouring books on investing. It was like a new world had opened in front of me. I discovered a person called Warren Buffett. He seemed to talk sense. Plus he had made this humongous amount of money. So, he became my first role model. Later I discovered Charlie Munger who has been an equally big influence on my life. Later on discovered many stalwarts in the investing world and tried to learn as much as possible about them. So, the journey started. Buying stocks, making mistakes, learning, reading, reflecting on the process of investing. This went on in cycles.

I had internalised the concepts of compounding and had gravitated towards buying quality companies which would compound well over time. I started investing with five thousand rupees and used to put in a couple of thousand every month.

The concept that I can be a part-owner of a business and participate in the profits of an enterprise fascinated me. I have always loved to follow the life and narratives of great businesses and business people. With history as one of my favourite subjects, I loved reading up on market history and finding patterns woven in the tapestry of past events that resonate even today.

Due to family commitments, I could not add any additional capital in my portfolio after 2010. But the 8^th wonder of the world, compounding, kept working and by around 2017, I was well on my way to being financially independent. It took another 2 years to convince my family to leave my job and becoming “just an investor”.  Then I started the advisory, again against the warnings from quite a number of close friends and well-wishers. But that’s a story for another day!!

Investing has given me freedom – financial and that of time. I know of no other way one can create serious wealth without having a lot of money to start with. It just requires patience, hard work, discipline in learning and an open mind to learn from one’s own and mistakes of others. Investing is a creative pursuit. The best thing about investing is, you enjoy the process and get handsome rewards while doing something you love!

Wish you all a Happy Independence Day. May you take a small step towards becoming financially independent yourself.

 

Abhishek Basumallick is the Head of the equity advisory www.intelsense.in for long term wealth creation and a pure quant focused newsletter at www.quantamental.in. Nothing in the article should be construed as investment advice. Please do your own due diligence before investing.